Wall Street is starting August with more gains, and U.S. stocks are climbing in early Monday trading following encouraging reports from around the world on the economy.
The S&P 500 was 0.7 per cent higher, tacking more gains onto its four-month winning streak, with Big Tech once again leading the way. Treasury yields also ticked higher in a sign of lessened pessimism. Canadian markets are closed because of the Civic Holiday today.
The Dow Jones Industrial Average was up 215 points, or 0.8 per cent, at 26,643, as of 10:05 a.m. ET, and the gains for tech stocks helped the Nasdaq composite jump 1.3 per cent.
Many competing currents are pushing the market in different directions, but the coronavirus pandemic and its impact on the economy remain the most forceful.
Reports showed that European manufacturing strengthened more in July than economists expected, which helped to lift markets globally.
The gains built after a followup report showed U.S. manufacturing growth accelerated last month at a faster pace than economists expected. The reports added to evidence that the global economy at least temporarily halted its free fall from earlier this year.
Earlier in the day, a private survey showed that China’s manufacturing activity also grew at a faster rate in July than expected.
U.S. relief effort talks resume
In Washington, meanwhile, slow grinding negotiations on a huge relief effort for the U.S. economy are set to resume on Monday.
Both the Trump administration negotiating team and top Capitol Hill Democrats reported progress over the weekend, though differences remain. At least several more days of talks are expected.
The discussions have taken on more urgency because $600 US in weekly benefits from the federal government for laid-off workers have expired, just as the number of layoffs ticks up across the country amid a resurgence of coronavirus cases and business restrictions.
Big Tech has remained almost immune to such concerns, though, driving higher through the pandemic on expectations that it can continue to grow.
Microsoft jumped 3.8 per cent after it confirmed that it’s in talks to buy the U.S. arm of TikTok, a Chinese-owned video app that is very popular but that also has drawn the White House’s scrutiny.
Microsoft said its CEO, Satya Nadella, has talked with U.S. President Donald Trump about it, and the tech giant expects the negotiation with TikTok to end no later than Sept. 15 either with a deal or not.
Apple added 4.6 per cent, piling more gains onto its 10.5 per cent gain Friday following a blowout report showing that its profits during the spring easily topped Wall Street’s expectations.
Those two stocks are the biggest in the U.S. stock market, which gives their movements huge sway over indexes. The pair alone accounted for about two-thirds of the S&P 500’s morning gain.
Health-care stocks were also strong, with Varian Medical surging 21.7 per cent for the biggest gain in the S&P 500. Germany-based Siemens Healthineers said it will buy the cancer therapy and research company in a deal worth roughly $16.4 billion.
Global indexes up
Germany’s DAX stock index returned 2.3 per cent following the strong reports on European manufacturing. France’s CAC 40 rose 1.6 per cent, and the FTSE 100 in London gained 1.6 per cent.
In Asia, Japan’s Nikkei 225 jumped 2.2 per cent, South Korea’s Kospi edged up 0.1 per cent and the Hang Seng in Hong Kong slipped 0.6 per cent. Stocks in Shanghai rose 1.8 per cent.
The yield on the 10-year Treasury rose to 0.56 per cent from 0.53 per cent late Friday.
Benchmark U.S. crude rose 1.3 per cent to $40.78 per barrel. Brent crude, the international standard, was up 0.2 per cent at $43.61 per barrel.